TMI Blog1993 (5) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... ceipt of Rs. 1,70,54,437 the deduction computed by him was of a sum of Rs. 1,49,00,279. We may not fault the Assessing Officer for following the procedure adopted by him to compute the admissible deduction under the provisions of s. 80-O. This is in view of the clear provisions of s. 80AB, which read as under: "80AB. Where any deduction is required to be made or allowed under any section (except s. 80M) included in this Chapter under the heading 'C-Deductions in respect of certain income' in respect of any income of the nature specified in that section which is included in the gross total income of the assessee, then, notwithstanding anything contained in that section for the purpose of computing the deduction under that section, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion under s. 35B, which has been accepted by him in the computation of deduction admissible under s. 80-O at Rs. 5,05,054. 2. The second ground, which is against the claim of the assessee for relief under s. 91(1), was not pressed at the time of appeal hearing. 3. The assessee was allowed to raise an additional ground of appeal and this additional ground reads as under: "The learned Assessing Officer failed to appreciate that for the purpose of computing deduction under s. 80-O, s. 80AB was not applicable and the deduction was available with reference to the convertible foreign exchange received in India." Here again, we have heard the parties to the dispute and we feel that there is no merit in this ground of appeal. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of dividend received from the paying company, when that is not the amount which was liable to suffer tax in the hands of the assessee. The claim before the Supreme Court in that case was that relief under s. 80M was to be worked out on the basis of the gross dividend income and this was the claim that was negatived by the Supreme Court. As observed earlier, the provisions of s. 80AB were not available in the statute book at the relevant time. Even so, the Supreme Court thought it fit to take a view not favourable to the assessee. The contention of the learned counsel for the assessee that if the provisions of s. 80AB were held to be applicable while computing the relief admissible under s. 80-O, the same would lead to anomalous results h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of s. 80AB have to be totally ignored. The difficulty contemplated by the assessee, to our mind, does not exist. If the intention of the legislature was to allow relief with reference to the gross income nothing prevented the legislature from enacting suitable provisions to that effect. The statute, in fact, has made an exception in the provisions of s. 80AB by excluding therefrom s. 80M of the IT Act. The reason why s. 80M was excluded may be for the purpose of giving the deduction under that section in a particular manner with retrospective effect. But this is clearly indicative of the fact that the provisions of s. 80AB have to be applied in respect of all the sections contained in Chapter VIA of the IT Act. We, in the circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suffice if we refer only to the decision of the Apex Court in the case of CIT vs. Maharashtra Sugar Mills Ltd. 1973 CTR (SC) 489 : (1971) 82 ITR 452 (SC). In that case the Supreme Court had held that the entire managing agency commission had to be allowed as a deduction in computing the profits of the assessee exigible to income-tax. In that case, the assessee had also income from agriculture, which formed miniscule percentage which was not taxable, and the ITO had held that the part of the managing agency commission paid by the assessee was attributable to income which was exempt from tax. The Supreme Court, no doubt, decided the issue in favour of the taxpayer only for the reason that the managing agency commission was held to be expendi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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